Buzz on the bourse: Nirav Modi’s moved to sylvan St. Kitts

The scam-tainted diamond jeweller is on the cusp of acquiring citizenship of the Caribbean island nation, and has already bought a villa there.

On Saturday the Ministry of External Affairs (MEA) revoked the passports of tainted jeweller Nirav Modi and his uncle, Mehul Choksi. Perhaps anticipating this very move, Nirav Modi, who seems to have turned keeping one up on the authorities into some sort of an art form, had applied for the citizenship of the Caribbean island St Kitts and Nevis.

Well-placed sources in the diamond trading communities of Mumbai and Surat told this reporter that the 48-year-old Modi and has family (his wife Ami is an American citizen), are already in St Kitts where they have bought a villa which is helping to speed up the paperwork for his citizenship. “He has been planning this for a while now. In fact, he visited St Kitts along with his family last week,” revealed a senior diamond trader who did not wish to be identified.

St Kitts, located in the eastern Caribbean, with a population of about 50,000, makes an ideal hideout for Modi because, despite being part of the Commonwealth and a friendly nation, it does not have an extradition treaty with India. According to the St Kitts and Nevis government’s website, applicants can qualify for citizenship through a contribution – around Rs 1.6 crore -- to the Sugar Industry Diversification Foundation, a public charity focused on diversifying the nation’s economy, or by investing to the tune of about Rs 2.8 crore in a pre-approved real estate project. St Kitts and Nevis tourist visa is not required for Indian citizens for a stay of up to 30 days.

“Now that his passport has been revoked by the MEA, he will set up another diamond trading unit in either Singapore or Hong Kong,” said another old diamond industry hand who too did not wish to be identified. “He can do this and continue to evade Indian authorities, because neither of these countries will extradite him, since he will be a St Kitts citizen soon.”

In choosing St Kitts, Modi, who fled the country in the first week of January after allegedly scamming Punjab National Bank of Rs 11,000 crore along with his uncle Mehul Choksi, is treading the same path that was taken over 8 years ago by another scam accused and a fellow Palanpuri Jain, Jatin Mehta. Mehta’s Winsome Diamonds and Jewellery (formerly Su Raj Diamonds), which was headquartered in Surat, owes its lenders, among them State Bank of India and Bank of Baroda, about Rs 4,686 crore. Mehta and his wife fled India in 2013, and he and his wife reportedly bought citizenships of St Kitts and Nevis the same year. Winsome Diamonds and Jewellery is among India’s largest corporate defaulters, and the banks have so far been able to recover only about Rs 120 crore. “Jatin Mehta is now believed to be running his own synthetic diamond firm in Singapore. His sons often visit India in connection with his business,” said a diamond industry source based in Surat.

Diamond traders in both Mumbai and Surat told this newspaper, it was unlikely that Modi would ever be brought back to face the law. “Look at Jatin Mehta. There are ED notices at all his offices in Surat, but the man himself is probably living it up,” said a Surat-based diamond trader. And now, he even has company.

While Nirav Modi himself remains incommunicado, his lawyer Vijay Aggarwal was critical of the government’s move to revoke his client’s passport.

“The passport of my client has been revoked in violation of the guidelines and court rulings in this regard as at the moment, there is only an FIR against him, and no prosecution has been launched. We may approach court against the order,” Aggarwal had told media persons.